Single Touch Payroll Penalties

Single Touch Payroll (STP) has certainly given bookkeepers and their clients a lot to think about, and we all can appreciate that the ATO has taken a measured and considered approach to its implementation. But we all know that this approach was going to change once businesses were given sufficient time to prepare for the STP implementation phase.

Going forward the expectation of the ATO will quite rightly shift to an oversight model that acknowledges the complex nature of STP implementation for small business but also assigns appropriate penalties for those who don’t comply with the new reporting requirements.

The ATO have informally advised that they aren’t looking to directly pursue and impose penalties for small and closely held entities for the next 12 months to allow them time to settle into the new reporting regime.

However, the Institute of Certified Bookkeepers strongly recommends that all small businesses are reporting by the current 30th September 2019 deadline. Small and closely held entities not reporting by the current deadline may benefit from an exemption term upon application and thus avoid the risk of attracting penalties, noting that this term will be ending on the 30 June 2021. Concessions for larger employers no longer apply.

The ATO penalty documentation now lists that failure to lodge STP reports is a failure to lodge event. A failure to lodge penalty is calculated at a rate of $210 dollars per 28 day interval of lateness or part thereof. This is capped at 5 penalty units. Companies with turnover between $1-20 million will see this penalty multiplied by two ($420). Large companies with turnover in excess of $20 million will see their penalty multiplied by 500 ($105,000).

These recent changes to the ATO’s penalty documentation are available for your review at the link provided below. The ATO penalty documentation, per the ATO website indicates that each penalty event will result in a $210 penalty assignment, while the cap levels were outlined by Acting Director Amanda Lehmann at a recent ATO presentation. Ms Lehmann noted that only a minute number of letters have been sent to large firms neither lodging or applying for deferral.

Clearly it’s in everyone’s best interests, to ensure STP compliance. If you do need to apply for STP lodgement deferrals, please contact us.

PREPARED BY THE INSTITUTE OF CERTIFIED BOOKKEEPERS